Airtel renews 4G pact with Nokia for expansion

Airtel is expediting its network expansion and ramping up capacities, especially in rural areas. The telco’s chief technology officer Randeep Sekhon confirmed signing the new contract with Nokia to ET.

Under the contract, Nokia will provide professional services including network integration and network planning and optimisation.

NEW DELHI: Bharti Airtel has awarded a $1-billion contract to Nokia to expand and modernise its 4G network in nine circles, including rural areas, where the Finnish company has already provided equipment to the telecom operator.

Airtel is expediting its network expansion and ramping up capacities, especially in rural areas. The telco’s chief technology officer Randeep Sekhon confirmed signing the new contract with Nokia to ET.

“Renegotiations were on for some time where Airtel was seeking reduced prices under the newly constructed agreement. Such talks are already on with other vendors like Ericsson, Huawei and ZTE in their respective circles where Airtel is seeking new prices,” a person familiar with the matter said.

Airtel had awarded the original 4G contract to Nokia for Gujarat, Madhya Pradesh, Bihar, West Bengal excluding Kolkata, Odisha, Mumbai, Maharashtra, Kerala and UP East circles in 2016. The deal size was pegged at $500 million, ET Telecom had reported.

Sekhon, in a recent interview to ET, said rural and suburban areas are seeing more traffic on Airtel’s network than urban areas after the nationwide lockdown came into effect a month ago.

Under the contract, Nokia will provide professional services including network integration and network planning and optimisation.

Airtel recently invited bids for Tamil Nadu, which is currently served by Chinese equipment maker Huawei. The process is still on, another person said.

“Operators including Bharti Airtel are under significant pressure to reduce cost given limited revenue growth due to stagnating subscriber additions and limited ARPU (average revenue per user) growth,” Ashwinder Sethi, principal at Analysys Mason, told ET. Contract re-negotiation will help maintain EBITDA margin and profits in a saturating telecoms market, he added.

Airtel recently replaced Huawei with Sweden’s Ericsson for 4G network expansion and modernisation in Rajasthan, with the deal including deployment of voice over LTE (VoLTE) services. Huawei now works for Airtel in three telecom circles, as does China’s ZTE Corporation.

Sunil Mittal-led Airtel is also expanding its rural coverage to better compete with bigger 4G rival Reliance Jio Infocomm. It planned to add 22,000-26,000 4G sites across the country to improve rural coverage and increase capacity to address data demand in urban areas, ET reported in March.

Airtel awarded a new contract to Ceragon for 4G network expansion, especially around rural areas, last week.